4 Points To Consider While Paying Token Money For Property Purchase

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Admin 20 Apr 2024 15,078 Views

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Listen up my friend, buying a property is not a joke. There are a lot of things that must be taken care of. You need to know how to manage your finances well, if not then you can take the help of a close one to assist you through the process.
It’s very crucial to have a clear understanding of the legal procedure. Let’s say for instance you are looking for a property in Delhi, or any other city then in order to book the property you will be expected to pay the token money.

Let’s check out the points that you must keep at the back of your head at the time you pay the token money:-

1. Keep evidence of the payment
You must have proof that displays you have paid the token money. Many cases keep happening daily in which people don’t have proof, so you must have a receipt with you or MOU that states you have given the token money.

While signing an MOU (Memorandum of Understanding) you must check that the following details are mentioned in it:

Information about buyer and seller: The document must exhibit the full name of both parties along with their complete addresses and a government id proof such as Aadhar Card or Pan Card. In most cases, Pan Card is given more preference.
Details about the property: Every single thing about the property must be present in the official documents of the property like floor number, area of the flat and the basic amenities that are available at the time.
Payment Details: The receipt of the MOU should also have the time at which payment was made, the amount of token money paid. Another important factor is through which means is the token money paid through online mode or offline mode.
Timeline: The property papers must show the timing at which payment was made in the name of the seller. The full schedule of the payment must be specified.
Clause of Termination: The termination clause must be there in the document. This clause will tell you the terms and conditions under which the agreement can get terminated. And if in any case the agreement gets terminated, then the seller will pay a refund to the buyer. On the other hand, if the deal gets cancelled by the side of the buyer, then a penalty will be imposed on him/her.

2. Be aware of your rights when you pay token money

The seller of the property cannot resell the property if he/she has acquired the token money from any party. Frauds are a common sight these days, many sellers accept token money from one party and sell the property to another party.
If an unexpected event like the death of one party takes place, then the rights are passed on to their legal heir. In case the seller passes away, then the legal heir has two options: either to return the token money or to hand over the property to the buyer. The token money is the initial amount paid to the seller to get their hands on the property. Paying token money is a small part of the whole deal.

3. Pay the token money in the presence of witnesses
It’s better to be safe than sorry. Make sure that you pay the token money with witnesses. Try to sign the papers of agreement with at least two witnesses. If you get the receipt in front of other people then you have someone who can authenticate the deal if any dispute takes place between the seller and the buyer.

4. Try to avoid paying the token money in cash
Arranging a huge sum of money is not an easy task. It’s very beneficial for both the seller and the buyer if the transaction takes with the help of a bank. This way, it will save a lot of time and energy for both parties. If the transaction takes place without involving cash, then it’s a win-win situation for both sides.
For the seller, it will be great if he/she receives the token money online. Online transactions are safer and more secure than offline transactions. Do your best to keep the token money as low as possible. The buyer and seller can have a discussion and come to a middle ground.

Conclusion
When you are looking to buy a real estate property, it is necessary to pay the token money to book the property. Kindly adhere to the points given above before you pay the token money to the seller. Take precautions as you don’t want to end up losing your hard-earned cash. As a buyer, having proof in hand should be on your priority list. Before signing the agreement, ensure that you are well versed with every word mentioned in the agreement.

About Author

Jatin Dubey

An enthusiastic content writer who is a law graduate and has been working as Real Estate Consultant for around 9 years.
He has worked with top Real Estate Agencies and Builders in Delhi, Bangalore and Pune. His skills to perform market analysis and explore high potential localities has helped many clients in the past.

Points To Consider While Paying Token Money for Property Purchase

Let’s check out the points that you must keep at the back of your head at the time you pay the token money:-

While signing an MOU (Memorandum of Understanding) you must check that the following details are mentioned in it:

Jatin Dubey

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